Data, speed, creativity

Armin Müller
Member of the editorial board Tamedia
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Tamedia is more than just a media company: seven statements about the transformation process shaping classifieds, marketplaces and ventures.

Innovations are reaching us increasingly quickly. It took more than 70 years for half the population of Switzerland to get a telephone and another 25 years or so for a PC, but only ten for Internet access and less than six for the smartphone. During the first Internet boom in the late 1990s, it was said that a year on the Internet was the equivalent of four in the real world. And the evolution of the digital world has only accelerated since then.

Customers’ expectations in terms of the benefit, speed, convenience and experience of their products and services are rising constantly, so Tamedia’s classifieds, marketplaces and ventures activities also need to continuously reinvent themselves and develop in order to anticipate and meet the needs of their users.

The seven statements below help to illustrate the trends shaping the landscape of our classifieds, marketplaces and ventures activities and how Tamedia is driving the digital transformation.

1. Business models are in constant flux

The first-ever websites for classifieds were mainly made up of print ads put online. Those days are long gone, however, and the sites have now evolved into multifaceted platforms that offer users much, much more: interactive maps, comprehensive data analyses, complex charts and diagrams, added-value services and many other features.

Take the online job platform JobCloud, for instance, which brings employers and candidates together by developing recruitment solutions and providing jobseekers with extensive assistance and content for their career planning. On Homegate, Switzerland’s leading real estate marketplace, users can view houses and apartments from the comfort of their own home on a 360-degree video tour, for example. The car portal carforyou.ch, meanwhile, offers a similar level of convenience for anyone looking to buy a car.

Last year, 4.88 million items were sold on ricardo.ch, Switzerland’s largest transaction marketplace – meaning that a product flew off the virtual shelf every six seconds.

At the same time, offerings are becoming increasingly diverse and are moving towards performance-based billing models, meaning that the customer pays for their success. Since autumn 2018, for instance, the performance element has been the primary form of the service offered by the marketplace ricardo.ch, in which the seller does not pay until a transaction has been completed. The JobCloud model sees corporate clients only pay for their actual performance in the form of clicks (“pay per click”), new contacts (“pay per lead”) or applications (“pay per applicant”).

Whereas most platforms used to broker between supply and demand, i.e. merely putting the buyer and seller in touch with each other, they are now starting to embrace the transaction side of things, with more and more models where the platform itself handles the actual deal. Last year, 4.88 million items were sold on ricardo.ch, Switzerland’s largest transaction marketplace – meaning that a product flew off the virtual shelf every six seconds.

At the same time, many sectors are seeing a trend towards subscription-based models. These strengthen customer loyalty while generating a steady flow of income, allowing providers to use subscriptions either as a second source of earnings alongside advertising or as their primary form of revenue generation. In the latter case, this often exploits a “freemium” model, whereby a basic form of the product is offered for free but the full version and any extra features have to be paid for. The premium model for the online scheduler Doodle, for instance, gives the customer an encrypted, ad-free environment as well as additional calendar synchronisation, user management and branding features. The equivalent for the TV streaming provider Zattoo, meanwhile, offers users a wider choice of stations and options for watching on demand. With their subscription models, for example, homegate.ch and tutti.ch provide features for enhancing the visibility of ads plus other extras.

2. The focus is on the end user – and thus on the user experience

The days of engineering a successful launch for a mediocre product simply by throwing enough marketing at it are long gone. Today’s end users can pick from a whole host of various offers. They expect nothing less than unique products and services and require a user experience that is quick, convenient, reliable and tailored to them. Their look and their demands define what a good product has to be.

As well as requiring a change in the provider's corporate culture, this consistent focus on the user also calls for more and increasingly specialised skills in fields such as user experience research and design.

Tamedia worked to expand its relevant competencies last year and set up a Group-wide centre of expertise to support all the company’s digital offerings.

3. Technology is getting more sophisticated – and less complicated

Complex business models and sophisticated products require high-calibre technological solutions. Rapidly changing market requirements mean that there is nothing unusual in a product that hundreds of thousands of people in Switzerland use on a daily basis being modified 50 times a day. For example, the ricardo.ch platform was completely overhauled last year.

This calls for IT architectures that are both highly flexible and scalable and that can be adapted in line with changing performance requirements. In particular, it also requires a great many talented individuals. For this reason, Tamedia not only kitted out numerous existing platforms with cutting-edge architecture such as microservices last year, it also set up a engineering centre in Belgrade to join other development bases in France, Germany and Israel. This is enabling the company to benefit from the very strong local IT ecosystems in these countries as well.

Innovations reach us faster and faster: Tamedia employee Büşra Coskuner with virtual reality goggles.

4. Data is the new oil

Data that is analysed and used in the right way can give companies the edge over the digital competition. Harnessed smartly, it can pave the way for products and processes to be continuously improved to the benefit of customers while also laying the foundations for developing new, data-based business models.

For instance, state-of-the-art analytical models show carforyou.ch customers in an instant whether a used car is cheaper or more expensive than the market average, taking full account of all the extras as well as mileage and numerous other factors besides.

The extensive flow of data from the various companies in the portfolio can in turn be used to shape products and services.

Many providers on the market are at a disadvantage because the nature of their business relationship only allows them to see one specific facet of their customers. By contrast, Tamedia has a much more comprehensive picture of its end users thanks to its broad thematic scope and wide range of contacts.

The extensive flow of data from the various companies in the portfolio can in turn be used to shape products and services while also opening the door to marketing innovations. For example, Tamedia’s group-wide centre of marketing expertise, which was established last year, uses complex models to optimise the marketing mix so that marketing budgets can be put to the best possible use.

5. Globalisation is marching on unchecked

The barriers presented by time and structural considerations are much lower in the digital world than in the traditional markets, enabling the major international players like Amazon, Facebook and Google to make themselves ubiquitous. And strong Chinese providers are likely to elbow their way into Europe before too long as well.

In order to hold its own against the digital giants, Tamedia is maintaining its commitment to strong products, a consistent focus on the end user, strong positions in individual markets and its intimate knowledge of local conditions.

However, Tamedia is not stuck in a siege mentality and is not restricting itself to defending its healthy market position. The company is growing increasingly international. ricardo.ch, for example, now employs staff from 40 countries and has adopted English as its corporate language. Zattoo opened a new office in Singapore last year to spearhead its expansion in the Asia-Pacific region.

Tamedia has significantly expanded its formal and informal network throughout Europe and in selected locations further afield. This allows it to study some 1,500 companies every year for potential investments in Switzerland and abroad. Tamedia is constantly involved in investment projects in other European countries, either embarking on new business ventures in a familiar market or taking a familiar business activity and rolling it out to new markets. However, new forms of business in new markets are out of the question.

Know-how is an important resource: Tamedia employees Eloy van der Sman, Jean-Claude Gerber, Meryem Riahi and Albina Muhtari.

6. Money on its own is not enough

For a few years now, there has rarely been a shortage of capital for investment projects. Start-ups and established providers can take their pick of investors. The resources that are really in short supply are expertise, experience and skills.

Digitalisation has caused sweeping, radical change at Tamedia and continues to do so. The broad thematic scope of the company’s portfolio and its growing diversity and international flavour enable it to contribute extensive know-how to the companies in its portfolio and work with the management teams to develop them further. Increasingly, this is proving a major advantage over investors that are simply stumping up capital. And Tamedia needs not always exercise control, provided that it can exert influence on a strategic level.

7. Synergy effects are becoming a competitive advantage

The increasing power of processors and bandwidths and the high technological overheads in developing digital offerings are generating significant economies of scale in the Internet economy, benefiting the major international players in particular.

For the rest of the competition, the synergy effects that can be generated are therefore becoming increasingly important to strategically optimising their digital portfolio. Although numerous classifieds, marketplaces, ventures and publishing brands make up the Tamedia portfolio, Tamedia as a whole is much more than the sum of its parts.

Added value is generated through management synergies leveraged when developing and integrating digital activities, through coordinating development and product processes across different activities and through cross-media synergy effects in marketing.

A team of well over 100 experts supports the portfolio companies as well as the digital publishing offerings.

These effects can be harnessed in data management, inter-company offerings and shared infrastructure, to name but three. Thus its digital offerings, for instance, benefit from the wide coverage of Tamedia’s strong publishing brands, while the TV streaming provider Zattoo benefits from the partnership with the TV marketer Goldbach, which was acquired last year.

A team of well over 100 experts in mergers and acquisitions, data analytics, engineering, UX, product innovation and marketing supports the portfolio companies as well as the digital publishing offerings. These specialists serve as internal advisors, combining the speed and great entrepreneurial agility of a portfolio approach with the benefits of sizeable economies of scale.

The key role played by corporate culture

Tamedia’s classifieds, marketplaces and ventures activities are constantly growing and developing as it focuses squarely on the users.

The broad thematic scope of its digital offerings, its healthy market position and its increasingly international flavour present its employees with exciting career prospects and the chance to really make something happen. This means that Tamedia can source and retain the talented people required to master this rapid change.

Nowadays, Tamedia is both a modern publishing house and a digital company that need not shy away from comparison with other digital players. Data-driven business models, cooperation across all companies and departments, a consistent focus on the users and flexibility in adapting to a rapidly evolving environment – all of these elements shape a corporate culture without which the digital transformation would not even be possible.

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